Question

Rodriguez Corporation issues 18,000 shares of its common stock for $174,800 cash on February 20. Prepare journal entries to record this event under each of the following separate situations. The stock has a $8 par value. The stock has neither par nor stated value. The stock has a $4 stated value.

Answer 1

a.

Date Account Title Debit Credit

Feb. 20 Cash $174,800

Common stock $144,000

Paid-In Cap. in excess of par $30,800

Working

Common stock = 18,000 * 8

= $144,000

Paid-in cap. = 174,800 - 144,000

= $30,800

b.

Date Account Title Debit Credit

Feb. 20 Cash $174,800

Common stock $174,800

c.

Date Account Title Debit Credit

Feb. 20 Cash $174,800

Common stock $72,000

Paid-In Cap. in excess of par $102,000

Working

Common stock = 4 * 18,000 = $72,000

Paid in cap = 174,000 - 72,000 = $102,000